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Another record profit for a bank

ASB's full year profit of $806 million was a "good result for the business", chief executive Barbara Chapman says.

Wednesday, August 13th 2014, 1:28PM 1 Comment

It reported a record statutory net profit for the 12 months to June 30, $806 million, which is 14% higher than last year.

Key numbers in the result include cash net profit rising 11% on the previous year to $776 million; net interest margin increasing 0.13% to 2.38% and the level of impaired loans remained at $56 million - the same as last year.

ASB's lending growth came from the commercial, rural and business sectors. Chapman said ASB had backed off a bit in the residential lending market because of price competition.

She had seen deals in the market ASB wouldn't do as they didn't stack up.

While the house price inflation had been running at around 9%, she expected it to drop back to around 4% annually.

During the year ASB's home loan book grew 3%, business and rural loans grew 8%, and customer deposits lifted 6%. Total advances to customers were up  5% to $60.66 billion.

Chapman said a "steadily improving economy" and favourable fund conditions helped the bank achieve a strong result.

ASB, which is one of the big three banks that deal with mortgage advisers is "watching" Westpac's decision to resume trail commission payments. ASB doesn't pay trail commissions, however its wholly-owned insurance company Sovereign does.

While ASB increased its return on equity from 17.0% to 17.4%, Chapman said it was unlikely it would get back to the 19% achieved in 2012 as there was too much pressure on margins now.

"It will be difficult to achieve in the future."

« Westpac CEO resigns[MRadio] A refi tale »

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Comments from our readers

On 20 August 2014 at 4:03 pm AFA Muggins said:
Useful to remember that the banks massively widened the margin between the OCR and floating mortgage rates during the GFC, and have not reduced the margin back again, and at the same time as mortgage rates and the OCR have increased since the GFC, savers deposit rates haven't. How could they NOT make even more profit !!

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA ▼4.55 ▼3.55 3.89 3.99
AIA Special - ▼3.05 3.39 3.69
ANZ 4.44 3.55 3.85 4.49
ANZ Special - 3.05 3.35 3.99
ASB Bank 4.45 ▼3.55 3.89 3.99
ASB Bank Special - ▼3.05 3.39 3.69
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - 3.09 3.35 3.69
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.75 4.10 4.55
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - ▼3.15 ▼3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland ▼3.95 ▼2.89 ▼2.97 ▼3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 ▼2.95 ▼3.09 ▼3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 3.94 4.08 4.39
Kiwibank 4.40 3.84 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - 3.09 3.39 3.65
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 ▼4.09 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.45 3.89 3.94
RESIMAC Special - - - -
SBS Bank 4.54 4.85 5.05 5.49
SBS Bank Special - ▼3.09 ▼3.39 ▼3.69
The Co-operative Bank - Owner Occ 4.40 ▼3.25 ▼3.45 ▼3.69
The Co-operative Bank - Standard 4.40 ▼3.75 ▼3.85 ▼4.19
Lender Flt 1yr 2yr 3yr
TSB Bank 5.34 ▼3.89 ▼4.15 ▼4.49
TSB Special 4.54 ▼3.09 ▼3.35 ▼3.69
Wairarapa Building Society 4.99 3.95 ▼3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 3.09 3.39 3.69
Median 4.60 3.65 3.89 3.99

Last updated: 31 March 2020 8:55am

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